Tuesday, 14 June 2011

“Going forward” and “covering off points”- the drive for better procurement in Central Government and beyond.

In his keynote address for the opening of the Public Procurement Show at London’s Excel Centre , Martin Chown, director of business services of Buying Solutions gave an update of his team’s role and achievements over the last year.

The slice of the pie chart projected with some difficulty -due to the stubbornly unresponsive slide changer - showed Procurement representing £236 billion, some 30% of Public Spending.

A hefty £66 billion is Central Government.Director of business services at Buying Solutions Martin Chown

It is clear that Procurement has to be tackled and reduced. To make this happen much has to be learned from the Private sector and much listening has to be given to those who have to implement Government and EU directives and their stakeholders.

Short term wins have been through Demand Management Reduction, Price Savings and Efficiency gained in areas such a fleet where better utilisation has helped gains as much as Price % reduction.

The total Central Government spend has reduced from £13 to £10 billion.

Not for the only time of the talks I attended at the show, The Green Report was raised as a rude awakening of public sector procurement’s shortcomings but Mr Chown pleaded that things were already improving.

The Green review had positive points to make as Mr Chown emphasised such as Energy and Fleet but he also stated much improvement was required in areas such ICT, Travel and Print.
Mr Chown stressed the importance of executive buy-in from the top from Cabinet Officer Minister, Francis Maude and the appointment of the first cross-Government CPO, John Collington. Government policies were driving improvements in Processes, People, Technologies and Results.

• More spend with SMEs
• Meaningful transparency
• Reduction in sourcing and time
• A higher % of trained and qualified staff
• Deployment and operation of enabling technology
In Mr Chown’s greyhound-like paced presentation, there was much ‘covering off of points’ and ‘Going forward’ a verbal habit that I think was revealed a symptomatic need to drive change in the world of Public Procurement which like an ocean tanker takes some time to change direction for a more profitable course.

Results to date had rendered spending controls of £1 billion so far

• The Launch of Contract Finder had produced 1400 contracts so far( scroll down for link)
• Consultancy spend had been reduced by 55%
• Travel was down by 32%
• And Office supplies by 35%

• The MCO initiative led to renegotiation with top suppliers and some £ 800 million has been saved.

For the future (“Going forward” for the nth time!) Mr Chown summed up his key factors:-

• Lean and efficient structures and processes

• Top level Buying and support
• Transparency

• Centralisation and aggregation of spend

• Effective use of technology

And finally most importantly engaged and motivated people supported by better Processes, Training and Technology.

(Les Johnson's sculpture at the foot of the west entrance of the Excel - " Landed" A metaphor for Public Procurement ? It has always been "the people" who embrace change that make a difference. Either they get their hands 'dirty' or they administer the change. Maybe some do both!)

Martin Chown took some questions-in the answers of which he expanded the point about Contract Finder that of the 1400 contracts of £10k + of which 440 went to SME. When challenged whether the Government’s 25% SME value target was just a dream for headlining- Mr Chown robustly denied this.

Contracts were seen as good but Framework Agreement were coming under the microscope only if they did not cover
• Price
• Performance Matrices
• Value for Money

The Good Framework Agreements already, he emphasised, did so. There was still a long way to go on the journey and currently the focus was on Value and Pricing rather than efficiency.

( Buying decision changes from 12 months ago Buyers Views of Supplier Salespeople Survey scroll down for link for free executive summary of study)

From the Sales’ perspective all those in bidding and supplying public sector need to get close to the undoubted changes going on in Public Procurement. Those suppliers who are relying on the influencing power of their favoured stakeholders will be found wanting if they don’t build relationships in the growing power of Procurement management.

The changes occurring within Mr Chown’s current area of focus will be spilling over and sprayed across many other public sector areas beyond the confines of Central Government.

Click for free executive summary of Procurement's Views of salespeople research study

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